Working Capital 101

Author: Jeffrey Wisard

If you need money to grow your business or help keep it afloat, then you need access to working capital.

Meet the Joes.

They’re best friends and both decided to start their dream businesses at the same time: Joe’s Fries and Joe’s Ties.

Joe’s Fries is the best fry food truck around. Their curry and Sriracha fries are, as one reviewer pontificated, “Heaven realized in fried food form.” Joe’s business is booming and he’s thinking about purchasing another food truck, fryer and POS. While the business is a hit, he doesn’t have the cash he needs to expand.

Joe’s Ties has the best looking ties in town. Their 80’s glam + Athleisure moisture wicking ties are, as one reviewer grandstanded, “The next big thing in post-modern textile in the digital age.” Joe’s business is a huge success, but he’s run into some technology troubles: His POS and sewing machine both just went caput. While business is good, he doesn’t have the budget to replace broken equipment.

Two different tales of Joe, both filled with wonder and woe… And both with a simple solution to ensure a happy ending: Access to working capital. 

What is working capital?

Simply put, working capital is the money that a business has on hand for day-to-day operations. A simple formula to determine your working capital is:

Total Assets – Total Liabilities = Working Capital

Here’s an example calculation.

Joe’s Fries Balance Sheet




Accounts Payable










Monthly rent


Total Assets



Total Liabilities



Based on the formula, Joe’s Fries has: $5,550 - $4,500 = $7,000 Working Capital

Not bad, but most assuredly not enough to purchase a new truck, fryer and POS.

Why would you need working capital?

As both the Joes’ stories illustrate, there are a number of reasons why you might need more working capital. Here’s just a partial list:

  • Meeting your monthly payroll
  • Business upgrades and renovation
  • Paying off Federal, State or local taxes
  • Unexpected repairs or bills
  • Advertising and marketing
  • Relocation or location expansion
  • And many more

If you need money to grow your business or help keep it afloat, then you need access to working capital.

Where to find working capital providers

For many small and mid-size businesses, it’s become very difficult to obtain the working capital needed to grow, resulting in a very real need of an alternative solution to finance growth and expansion. That’s where working capital lenders help fill the gap.

If you do a simple Google search for “working capital lenders,” you’ll be inundated with all kinds of businesses with out-of-this-world promises to “Fast cash! No Fees! Get it now now now!” As with any big decision, you’ll really need to do your homework to figure out the best fit for your business.

Some practical tips for finding a trustworthy working capital provider: Check their reviews, check their Better Business Bureau Rating, talk with other small businesses about who they’ve used and, at the end of the day, make sure you feel good about working with the lender. 

To narrow your search, Worldpay has teamed up with RapidAdvance, a leading provider of working capital solutions, to help fill an important void in today’s business environment (Check out their BBB profile and Trust Pilot score).

In fact, we’ve even worked with RapidAdance to create The Secret To Your Success Infographic. Find out why you would need working capital and how to get it. 

small business lenders

Now you know the basics of working capital and what to look for when researching a capital solutions vendor.

Interested in getting a fast and flexible business loan from RapidAdvance?

Apply today!

Comments or questions?

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About the Author

Jeffrey Wisard is the Channel Content Marketing Manager at Worldpay. With deep experience in SEO, Content and Process Driven Digital Marketing, he’s able to help businesses segment their ideas to channel specific messages, realizing conversions and engagements that help SMBs grow. He’s also founded lifestyle specific festivals and created ROI driven digital communities, so he understands the needs of new and current businesses owners. When he’s not segmenting marketing messages, you can find him on his bike, run commuting and/or spending time with his awesome wife and super cool baby girl.  




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Written by:   ,  27 Sep 2017